An ecosystem built around the customer

Jon Rushton, commercial product management director at Bottomline Technologies, argues that the UK’s Open Banking initiative presents an opportunity for financial institutions to become much closer with their customers

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By Guest on 25 April 2018
An ecosystem built around the customer
This article first appeared in the Spring 2018 issue of The Record.

Open Banking is a UK-specific initiative that ties into the wider European Second Payment Services Directive (PSD2). Launched in January 2018, the initiative has had a reasonably soft start, but I believe it represents the promise of a new ecosystem built around the customer.

The key initial focus of Open Banking is about access to data. Both consumers and businesses will now be able to access their bank data, regardless of who they bank with, through a single interface. For most companies today, accessing and consolidating this statement information requires bank host-to-host services, which can be cost prohibitive, especially for small businesses.

Open Banking helps businesses have better visibility of their own and their customer’s account information. This enables businesses to work more effectively with their customers, suggesting product offerings, lending options or other services based on this data. With Open Banking, the retrieval of data and the initiation of payments will be available 24/7. That’s really important to businesses, especially those who rely on round the clock service. Restrictions are removed and trading can be done in line with a company’s trading hours.

There’s been a lot of talk about whether Open Banking will eliminate the relationship between banks and their customers, but I look at it the other way around. Open Banking and PSD2 give banks a way to become closer to their ­customers. Rather than just holding cash and providing products and services, they can become embedded into the digital lives of their customers – whether that’s an individual, a small business or even a large corporate.

The full possibilities of Open Banking won’t emerge for a few months because it’s a new market with new participants. But I see banks as the core of this new landscape. They’re anchoring the funds and as that bedrock, they allow the client to feel more involved with their financial planning and control.

For corporates, banks and fintechs, the promise of Open Banking isn’t that one of those groups will dominate. The promise is that all three can work together to create a real change in the marketplace. The first wave of services around Open Banking is predominantly focused on retail, small businesses and consumers. But as the Open Banking roadmap matures and more banks become Open Banking ready, companies like Bottomline Technologies will look to introduce more services around its products, helping businesses across various sectors capitalise on the possibilities the initiative presents.

Jon Rushton is a commercial product management director at Bottomline Technologies

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